Last updated: December 21, 2023

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An invoice is a form that requests payment from a customer or client. It lists the products or services that a customer or client has received, the itemized prices, and the total amount owed.

Our simple invoice template is perfect for small business owners, freelancers, and contractors who provide services such as the following:

• Construction, such as plumbing, electrical, HVAC services, and painting
• Home maintenance, such as cleaning, landscaping, and snowplowing
• Auto repair and moving services
• Consulting, such as training and guidance
• Design services, such as graphic design, interior design, and home staging
• Music provided by musicians or DJs
• Food services, such as catering or personal chef services
• Photography, video editing, and writing

First impressions matter, and using our template ensures that your invoices convey a sense of professionalism.

Whether you run a business or work independently, presenting well-designed and consistent invoices builds trust with your customers and clients and contributes to the growth and retention of your client base. Also, our template is customized to Canadian currency.

With our template, you can create a single invoice or a reusable template. A reusable template would be prepopulated with your business information so all you need to do is add the customer and purchase details for new transactions.

You’ll save valuable time and effort. Our template will help you customize details and generate invoices within minutes, allowing you to focus on what you do best – growing your business.

The main purpose of an invoice is to notify a customer that payment is due. Besides that, invoices can also achieve the following:

• Provide clarity and show customers a pricing breakdown so they know exactly what they’re paying for. Without an invoice, customers may have to email or phone you for clarification, which can be a hassle.
• Encourage timely payment and give customers an opportunity to pay without you reaching out for payment. 
• Keep you and your business organized and help you during tax season or an audit. Also, invoices help you track outstanding payments.
• Provide legal protection if a client or customer does not pay and you have to take legal action. You can better present your case by having a record of the date that you requested payment.

Invoices are different from receipts. Invoices allow you to make payment requests. Some businesses and contractors use the terms sales invoice, purchase invoice, or commercial invoice.

Alternatively, a sales receipt acts as proof of payment. If you need to create a proof of payment when selling or buying an item, consider using a Bill of Sale.

When you create an invoice, you may include some or all of the following information:

• Invoice number
• Purchase order (PO) number
• Purchase order date (the date the customer creates the purchase order)
• Shipping information, including the shipping address, mode of transport, the weight of the package, and the number of pieces being shipped
• Seller and buyer details, such as their names and addresses
• Sales tax information
• Item details, including the item’s name, description, price, and quantity
• Shipping and handling information (if applicable)
• Insurance information

If you are a service provider or contractor, your invoices may be simple and not include things like purchase order numbers. If you are a supplier that sells or ships goods, your invoices may include things like purchase order numbers and shipping information.

Invoice numbers are unique, identifying numbers that you designate to invoices. They can contain numbers and letters.

Invoice numbers help you track transactions and payments for a specific order. They are extremely important because they identify a specific purchase with its corresponding payment from the client or customer.

How do I assign invoice numbers?

Generally, contractors and small businesses will number invoices sequentially or chronologically. Let’s break it down:

• Sequentially means you assign your first invoice with a number, such as 1000000. The next invoice’s number would then follow in the numerical sequence. In this case, the next invoice number would be 1000001.
• Chronologically means you insert an invoice’s date into the invoice number along with a sequential number. For example, the first invoice you create on January 5, 2024 may be numbered as 20240105-01.

Whether you assign invoice numbers sequentially or chronologically, it’s important to make every invoice number unique. 

Additionally, you may choose to include an assigned customer number at the beginning of an invoice number and separate it by a hyphen. Including customer numbers can help you easily identify invoices for your different customers. 

You may include letters in an invoice number to help you further organize and identify customers, orders, and projects.

In Canada, your taxation rate depends on the place of supply, which is the province or territory where you make your sales or sell your services. For example, if you own an Albertan retail store and sell to a customer in Ontario, you should charge Ontario’s tax rate.

The current rates for taxable goods and services are: 

• 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
• 13% (HST) in Ontario
• 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island

GST stands for goods and services tax. HST stands for harmonized sales tax, meaning that the GST has been combined with the provincial sales tax. Most goods and services supplied in or imported into Canada are subject to GST or HST.

If a seller ships products to a customer, they usually send the invoice with the delivery. Alternatively, a seller or service provider may send an invoice by mail or email or deliver it in person.

For tax purposes, the Government of Canada states that you must keep all required records and supporting documents for six years from the end of the last tax year they relate to. 

Blue-Pencil, a document management company, reiterates this recommendation and says businesses should keep most documents for six to seven years.

Related documents:

• Bill of Sale: Transfer ownership of an item from a seller to a buyer.
• Sales Agreement: Outline the terms of a transaction in which a seller promises to sell something that a purchaser promises to buy.
• Service Agreement: Outline the terms of a service between a service provider and customer.
• Independent Contractor Agreement: Outline the terms of a working relationship between an independent contractor and a customer.

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